Why is the British pound / U.S. dollar currency pair known as “trading the cable”?

June 30, 2024 No Comments

A: The British pound / U.S. dollar currency pair is one of the oldest and most widely-traded currency pairs in the world. The term cable is a slang term used by forex traders to refer to the exchange rate between the pound and dollar and

What is the best method of analysis for forex trading?

June 30, 2024 No Comments

A: Forex analysis is used by retail forex day traders to determine buy or sell decisions on currency pairs. Forex analysis could be technical in nature, using resources such as charting tools. It can also be fundamental in nature, using economic indicators and/or news-based events.

Why is the U.S. dollar shown on the top of some currency pairs and on the bottom of others?

June 30, 2024 No Comments

A: All currencies are traded in pairs. The first currency in the pair is called the base currency while the second is called the quote or “counterpart” currency. Usually the most dominant currency, in terms of the other currencies against which it trades, is quoted

What is the Big Mac index?

June 30, 2024 No Comments

What is the Big Mac index?A: The Big Mac index, also known as Big Mac PPP, is a survey done by The Economist magazine that is used to measure the purchasing power parity (PPP) between nations, using the price of a McDonald’s Big Mac as

What is the correlation between U.S. stock prices and the value of the U.S. dollar?

June 30, 2024 No Comments

A: The correlation between any two variables (or sets of variables) summarizes a relationship, whether or not there is any real-world connection between the two variables. The correlation coefficient will always be between -1 and +1, which signify two opposite extremes of perfect correlations. A

What is the difference between extensive margin and intensive margin in economics?

June 30, 2024 No Comments

A: Trading on margin is not commonly done in stock trading except by professional investors and institutional traders. However, trading on margin is standard practice in the futures markets and forex trading. The ability to trade on relatively low margin, with high leverage, is part

What is the difference between inflation and stagflation?

June 30, 2024 No Comments

A: Inflation is a term used by economists to define broad increases in prices. Inflation is the rate at which the price of goods and services in an economy increases. Inflation also can be defined as the rate at which purchasing power declines. For example,

What is the difference between LIBID and LIBOR?

June 30, 2024 No Comments

A: Both LIBID and LIBOR are reference rates set by banks in the London interbank market. The London interbank market is a wholesale money market in London where banks exchange currencies either directly or through electronic trading platforms. The acronym LIBID stands for London Interbank

What is the difference between pips, points, and ticks?

June 30, 2024 No Comments

A: Point, tick and pip are terms used to describe price changes in the financial markets. While traders and analysts use all three terms in a similar manner, each is unique in the degree of change it signifies and how it is used in the markets.

What is the name of the currency in New Zealand?

June 30, 2024 No Comments

A: The New Zealand currency is known as the New Zealand dollar. The currency was decimalized in 1967, and divided into 100 parts or cents. Before 1967, the currency was called the New Zealand pound. But since its decimalization, it has been called the New

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